Note: This page is intended to be viewed as part of a larger report.
> Return to Network of Global Agenda Councils 2011-2012 report

Issue Overview

The Global Agenda Council on Mining & Metals is an advisory group of professionals representing a broad spectrum of expertise in the mining sector. Its members are based worldwide, and apply their professions internationally, working with governments, institutions, academia, civil society and the mining industry.

The Council’s mandate is both strategic and practical. On one hand, its members work to identify strategic level issues and trends arising from the interrelationships among mining, people and the environment on a global level. On the other, they ensure that the Council’s work makes a difference “on the ground”, with respect to policy and practice at the national and local levels, with communities and at the sites of mining operations.

The mining sector holds great promise and potential for the developing world. It has been clearly demonstrated that responsible, sustainable development of a country’s natural mineral resources can be an effective mechanism for alleviating poverty. It can also build and strengthen national and local economies, act as a catalyst for later diversification of those economies, and significantly increase living standards. To realize this potential, sophisticated approaches must be developed to address the challenges and complexities that stand along the way.

During 2011, in an effort to provide a framework with practical solutions to the challenges of responsible mineral development, the Council played a leading role in the second phase of the World Economic Forum’s Responsible Mineral Development Initiative (RMDI).

A Framework for Advancing Responsible Mineral Development

The RMDI initiative has evolved into a project of central importance to the Council and one to which members give considerable time and attention. Ongoing since 2009, RMDI was designed to gain an understanding of the challenges and complexities involved in realizing the potential of responsible mineral development, to formulate the most effective solutions in terms of transparency, inclusivity and best practice, and to chart a roadmap towards successful implementation.

The first phase of the project, from 2009-2010, focused on identifying and characterizing the issues standing in the way of responsible, sustainable mineral development. Members of the Council supported the Forum in this consultation phase by identifying and involving the significant stakeholders in 13 selected countries in Africa (Ghana, Liberia, South Africa and Tanzania), in East Asia and Oceania (Australia, Indonesia, Laos, Mongolia and Papua New Guinea) and in Latin America (Brazil, Chile, Colombia and Peru). They also provided advice and suggestions through participation in workshops, individual phone interviews and group calls.

The research revealed that a fundamental, underlying challenge is an insufficient level of trust among governments, civil society and mining companies which gives rise to a cluster of related problems. The following obstacles were identified:

  • Limited expertise and institutional capacity of government, civil society, and companies
  • Inadequate inclusion of stakeholders in decision processes
  • Opaque negotiation and development processes, scarce information shared
  • Incomplete compliance, monitoring and dispute resolution components

The second phase of the project, conducted throughout 2011, focused on identifying solutions to these problems. During this period, the RMDI held workshops spanning all six continents, which were attended and sometimes led by Council members, to provide a framework with practical solutions to the challenges of responsible mineral development.

The workshops were held in Peru, Brazil, USA, United Kingdom, Switzerland, Ghana, South Africa, China, Indonesia and Australia.

The Forum’s Summit on the Global Agenda 2011, in Abu Dhabi, provided an opportunity for members to brainstorm on the definition of the different elements of the framework, and receive inputs and feedback from other relevant Global Agenda Councils. These included the Councils on Fragile States, Anti-Corruption, Africa and Migration.

The result of these consultations is brought together in the report A Framework for Advancing Responsible Mineral Development that was launched on 6 February 2012, in Cape Town.

This framework identifies six building blocks to address the recognized challenges and provide guidance for the next steps. The importance of each depends on its context.

  1. Progressive capacity building and knowledge sharing among all stakeholders
  2. A shared understanding of the benefits, costs, risks and responsibilities related to mineral development
  3. Collaborative processes for stakeholder engagement throughout the life cycle of mining projects
  4. Transparent processes and arrangements
  5. Thorough compliance, monitoring and enforcement of commitments
  6. Early and comprehensive dispute management

The six building blocks reflect the issues surrounding many developments. They include economic and social aspects, such as issues around taxes and royalties, local suppliers and hiring, environmental questions such as water, waste and land use, as well as health and safety concerns. Each of the six building blocks – and their corresponding actions, supporting case studies and initiatives – is discussed and explained in the report indicated above.

During 2012, the Council will continue to focus on the RMDI and support the Forum in achieving the key objectives and deliverables set for the third phase of the initiative:

  1. Use the “Advancing Responsible Mining” framework to facilitate country deep dives
  2. Disseminate and share the framework with the different stakeholders
  3. Continue alignment with all the relevant stakeholders involved in mineral development

Issues of Significance Arising From/Affecting the Mining Sector

The RMDI project is broad in scope and by definition includes many aspects that are central to the goal of responsible, sustainable development of mineral resources. However, in recognition of the Council’s mandate, members have also considered and monitored individual strategic issues of global significance arising from and/or affecting the mining sector. These include;

a) Host Country Governance Capacity Building: The challenge of host countries to develop the expertise and capacity to effectively manage their mineral resources.

The risks and inefficiencies associated with working in weak governance states are many, creating formidable barriers to sustainable development. Weak governance is the underlying driver for bribery and corruption. It places significant limits on the benefits of mining being realized by the host country society, access to land, security of tenure and the generation of geo-science databases – which all contribute in important ways to sustainable development of mineral resources.

Industry is starting to make progress with corporate social responsibility (CSR), but if parallel progress is not made with respect to host-country governance capacity building for mineral resources, that progress will be seriously limited.

There are many players in the governance capacity building space, at both international and national levels. However, most work independently of each other and the lack of a more strategic, coordinated approach results in inefficiencies and limits progress in this critical area.

b) Governing the Minerals Sector: The need to optimize the benefits of mining among host governments and their citizens, local communities, companies and their investors.

The minerals sector involves conjunctive use of resources that need attention to avoid their overuse or exploitation; it requires exploration information to ensure that most transparent and effective allocation practices are in place; and it has to develop improved benefit-sharing practices to make mining activity one that shares value more widely.

This is not happening spontaneously and dissatisfaction with the amount of economic rent accruing to indigenous communities in mining areas and their host countries’ coffers is a widespread problem in emerging economies. While it has been an issue for decades, the sentiment has become far more pronounced following the commodities boom and subsequent global financial crisis which has seen the flight of Western capital from these economies. This has severely compromised the exploration and development sectors in these countries and starkly underlines their dependence on external investors.

c) Integrated Approaches to Land Use Planning: The need for integrated approaches to land use planning and resource management as a key overarching strategy in the face of resource scarcity.

In developed countries, traditional approaches to land use planning are no longer adequate to manage the demands and complexities, and numerous conflicts have emerged. Various groups have been examining more effective, integrated approaches at the government regulatory and land-user levels. However, the integrated approaches have not yet been effectively implemented primarily due to barriers within government.

In developing countries, most do not have land use planning and resource management processes in place and/or do not have the capacity to implement such processes. The world’s mineral resources are being increasingly sourced from developing countries where issues around water, energy and food are already significant. Integrated land use planning and resource management approaches will be fundamental to addressing these complex resource challenges in a systematic and predictive way.

By employing the inherent strengths, resources and influence of the Forum, the Global Agenda Council on Mining & Metals is committed to providing direction and momentum towards responsible, sustainable mineral development and to help realize the potential this industry has to offer for the benefit of societies in developing countries.

 Disclaimer

The opinions expressed here are those of the individual Members of the Council and not of the World Economic Forum or any institutions to which they are affiliated.